Corbett raises idea of private Medicaid plans

By MARC LEVY, Associated Press

Wednesday, April 3, 2013

HARRISBURG, Pa. (AP) — Gov. Tom Corbett said Wednesday that he is interested in a concept that would give health care to hundreds of thousands of Pennsylvanians by using federal Medicaid dollars to buy private insurance.

Corbett revealed that he is seeking information about the idea a day after meeting with U.S. Health and Human Services Secretary Kathleen Sebelius about an expansion of Medicaid that's called for under the 2010 federal health overhaul. Some governors have resisted the expansion, citing fears that states will be stuck with more of the bill than forecast.

The idea of buying private insurance with Medicaid money was first broached by Arkansas' Democratic Gov. Mike Beebe as a way to get his Republican-controlled Legislature on board with the expansion. Other governors who also support a Medicaid expansion but face skeptical lawmakers are looking into it as well, including Democratic Gov. Jay Nixon of Missouri and Republican Gov. John Kasich of Ohio.

Under a proposal in the Arkansas Legislature, people who earn up to 138 percent of the poverty line, which amounts to $15,415 per year, would receive private insurance purchased using federal Medicaid dollars. The plans would be bought through the insurance marketplaces being created under the federal health care law.

However, a report from the nonpartisan Congressional Budget Office last summer said plans on the private insurance market are more expensive for taxpayers than traditional Medicaid coverage.

The report estimated that purchasing a private plan through the insurance marketplaces would cost $9,000, while traditional Medicaid coverage would cost $6,000.

Arkansas and Ohio are in talks with the Health and Human Services Department over the details, said Matt Salo, the executive director of the National Association of Medicaid Directors, a Washington, D.C.-based group that represents state officials.

"There are active discussions between Arkansas and the administration, and Ohio and the administration," Salo said. "They are working the policy, they are working the operations, they are working the logistics, and they are working the politics ... in recognition that this could be a game changer, and it could have a potential domino effect."

While discussions are going on in earnest, Salo said, he does not think the issues have been resolved yet. One major problem is that private coverage is more costly than Medicaid, so it's not clear who would pay the difference.

Corbett, a Republican who as attorney general sued unsuccessfully in court to strike down the Affordable Care Act, has said he is not supporting the Medicaid expansion without substantial changes because he is worried about the long-term cost to Pennsylvania's taxpayers.

"Until we know whether or not significant reform is possible, I continue to have concerns that Pennsylvania's Medicaid program will be able to serve, in a sustainable manner, the approximately one in four Pennsylvanians that would be covered under a full expansion," Corbett said Wednesday.

Corbett is under pressure to go along with a Medicaid expansion. Hospitals executives, top Democratic lawmakers, labor unions, the AARP, religious leaders and advocates for the poor are in favor of it.

An expansion would be likely to get approval in the Republican-controlled Legislature, if a bill is introduced. Many Republican lawmakers are staying quiet about the matter, preferring Corbett to take the lead. Only 37 Republicans out of 203 lawmakers in House are co-sponsoring a bill that would prohibit a Medicaid expansion, while to approve an expansion, just 11 House Republicans and three in the 50-member Senate would be needed to join with Democrats to vote yes.

The Affordable Care Act promises the federal government will pay for 100 percent of the newly eligible Medicaid enrollees for the first three years of an expansion, beginning in 2014, and phasing down to 90 percent after that. Corbett said he sought an assurance from Sebelius that Pennsylvania would qualify for the 100 percent reimbursement, and she appeared to give that assurance Tuesday.

Officials in more than half the states are either against the expansion or undecided about it.

The federal government currently pays roughly 55 percent of the cost of a Medicaid enrollee in Pennsylvania.